The cancer stem cell (CSC) theory depicts a special population within the cancer mass that self-renew and sustain the cancer, even if the other cells were eliminated by therapies. How CSCs acquire these unique traits is still unclear. Crumbs homolog 3 (CRB3), a member of the CRB polarity complex, has been reported to act as a tumor suppressor. Here, we detected significantly lower or negative CRB3 expression in human breast cancer tissues. Knockdown of CRB3 generated non-tumorigenic, immortalized breast epithelial cell line MCF 10A with CSC properties. Simultaneously, we found that CRB3 downregulation induced the epithelial–mesenchymal transition and activated TAZ (transcriptional co-activator with PDZ-binding motif) and β-catenin. Significantly, the activation of TAZ and β-catenin sufficed in conferring MCF 10A cells with CSC properties. This study demonstrates that cell polarity proteins may serve as a switch of the differentiated vs multipotent states in breast cancers.